Tour d‘horizon in Turkey 2015

Topic: "Energy - fuel for economies, states and societies"

The German–Turkish group of 20 energy experts from various sectors met in Istanbul and Adana to engage in dialog with experts from the fields of business, politics, and science. The participants visited energy companies, an oil terminal, and a hydroelectric power plant. The young executives also conducted their own scenario workshop that put forward two scenarios for the year 2050: "Building a road map for a low-carbon energy system" and "Geopolitics of energy in and around Turkey - Turkey as an important energy hub." Five of the "likeminds" give a brief assessment of the two scenarios:

Mirja Schröder

Research associate at the University of Cologne (including involvement in the project "Turkey’s Potential as a Future Energy Hub - Economic Developments and Political Options")

Turkey as an Energy Hub? An Analysis.

If things were to go the way Ankara and Brussels wished, Turkey would become an energy hub within the region. Both the EU and Turkey are heavily dependent on Russia for gas supplies. The government in Ankara and the decision makers in Brussels are on the lookout for alternative supply countries and routes in order to boost their own security of energy supply. The European Commission has been advocating the opening of a Southern Gas Corridor since 2008 in order to pipe non-Russian gas to Europe from the Caspian region via Turkey. This would constitute the EU’s fourth gas supply line in addition to Russia, Norway, and Algeria.

The Southern Gas Corridor

For a long time, the Nabucco pipeline was the centerpiece of the Southern Gas Corridor. Initiated by the European Commission in 2008, the aim of the pipeline was for Nabucco to pipe gas to Austria across a distance of 3,900 kilometers. But after years of what sometimes proved to be tough negotiations, the project was ultimately abandoned in 2013. This allowed the rival Azerbaijani project Trans-Anatolian Gas Pipeline (TANAP) to gain ground, and this is now set to pipe gas from Azerbaijan to the Turkish-Greek border starting in 2019, albeit in far smaller volumes than would have been the case with the Nabucco pipeline. From there, the gas will be piped to Europe via the planned Trans Adriatic Pipeline (TAP). In the EU, this is seen as a major step in the direction of greater security of supply. And Turkey will play a pivotal role as a transit country. In the wake of past Russian-Ukrainian gas disputes and above all following the Ukrainian crisis of 2014, the European Council and the European Commission increasingly stressed the strategic significance of Turkey with regard to their strategy of diversification away from Russia. Ankara has set itself the goal of becoming a key energy hub to boost Europe’s security of supply.

Turkey - Transit Country or Energy Hub?

This scenario first and foremost hinges upon there being significant volumes of gas that can flow to Europe via Turkey. The country’s geographic location is advantageous: more than 70 percent of global oil and gas reserves are to be found in the direct vicinity of Turkey. A future scenario might see gas fields in Turkmenistan, northern Iraq, or Iran becoming part of the pipeline system to Europe in the long term too, in addition to Azerbaijan. An energy hub differs to a transit country in that the energy commodities are not merely piped through the country, but are also traded there. This calls for a transparent market and a sturdy legal framework.

The Russia Factor

The question as to whether Turkey can assume such a role for the EU in the long term is not an issue which will be decided in Ankara alone. The planned TANAP and TAP pipelines will pipe 10 bcm* of gas to Europe and 6 bcm to Turkey per annum. This equates to approximately 2 percent of Europe’s total gas demand per annum. While other supply countries could be added later, the political instability in Iraq makes high investments there unlikely. Representatives of Iran’s state-owned gas company have announced that Iranian gas supplies will be shipped around the world in the form of liquefied natural gas (LNG), rather than Iran investing in costly infrastructure and transit fees to Europe. This makes Russia the key player. Following the abandonment of the South Stream project which would have piped Russian gas to Bulgaria, Gazprom is working on alternative routes to Europe. One solution which is currently the subject of fierce debate is expansion of the Nord Stream pipeline. A second solution is the construction of the new Turkish Stream pipeline project, which would pipe gas directly to Turkey and then onward to Europe. Turkish Stream would significantly enhance Turkey’s pivotal role in the supply of gas to Europe. However, this would not reduce Europe’s dependence on Russia.

Osman Zeki Gökçe

Research associate at the Sabancı University

In this scenario workshop, the main topic of our group was "Geopolitics of Energy in and around Turkey." We focused on Turkey’s prospective role in the region and envisioned Turkey as an energy hub where two conventional natural energy resources, oil and gas, can be bought, stored, sold, and transferred via Turkey. Our scenario started with an assumption that, ‘in 2050, Turkey would be an important energy hub at the intersection of three important regions: Caucasus, the Middle East, and Europe ’. Relying on back-casting method of scenario analysis, our discussions revolved around future political prerequisites rendering Turkey the most stable, secure, and trustable energy partner for other energy importer countries. More specifically, we handle three salient sub-scenarios in which Turkey needs favorable political developments referring to these prerequisites:

Resolution of Kurdish issue in domestic/foreign affairs, provision of security and political stability in Iraq and Syria, and restoration of political relations with the Middle Eastern countries,

more diversification of energy imports in order to decrease energy dependence on Russia, and

further integration of Turkey into the European Union.

These sub-scenarios are analyzed in an intertwined manner because political consequences of each scenario might be an important parameter for others. That being said, of these three sub-scenarios, provision of security and stability in the region seems the most critical to consider, the more challenging to be achieved, as well as the least possible to be realized in the medium term. Consequently, this delay would hamper the diversification of energy supply through the Middle Eastern oil/gas and Eastern Mediterranean gas to make Turkey less dependent on Russia in energy, and thus, in politics. In my opinion, rather than just focusing on a very long-term plan of being an energy hub in 2050, Turkey should progress in integration into the EU, and try hard to be a member of a European Energy Union which has been contemplated by the Commission as a priority to make energy more secure, affordable, and sustainable for the Europe. Turkey would definitely be the most critical and responsible part of this union due to its geopolitical advantages which might pave the way of being an energy hub in the future.

Titus Rebhann

Office manager/research consultant for member of the Bundestag Oliver Krischer

Energy, the driving force behind the economy and society, has made Turkey and Germany what they are today: countries with significant economic clout in their respective regions. But more than ever before, these two societies are facing immense challenges, on the one hand due to Anatolia’s hunger for energy, and on the other hand because of the energy transition being effected in the heart of Europe. The climate crisis, an increasing shortage of commodities, and rising energy prices are all issues that have to be resolved simultaneously. Both of these countries have to act in such a way that the generations to come still have options in the future. While the key levers that will allow German policymakers to achieve climate protection targets and to modernize energy supply ecologically are renewable energies, efficiency, and energy conservation, the driving force behind the transformation that needs to be implemented by Turkish politicians is the country’s dependence on oil and gas supplies from, for example, Syria and Iraq.

But these two countries are taking entirely different approaches: while Germany is set to exit the risky technology of nuclear power by 2022, Turkey plans to have built its first two nuclear power plants by the 2020s. While there are many factors that suggest a policy based on renewables, energy efficiency, and energy conservation will be less costly for the economy in the long run than a policy which is reliant on nuclear and fossil fuels, it is indeed already evident that nuclear power always represents a silent danger for the population. Chernobyl and Fukushima are the most obvious - but by no means the only - testaments to this failed energy policy.

It would be imprudent to make sweeping statements criticizing individual countries’ domestic policy decisions - which energy policy is to a great degree. Instead, we should put our own house in order first. Provided there is true political will to do so, Germany can demonstrate that exiting the highly dangerous field of nuclear power and winding down coal mining, which is harmful to the environment, can be a model of success and an export hit if coupled with a focus on renewable energies and energy efficiency. This decentralized energy transition is not only beneficial to the environment, but also generates work for innumerable people, be they scientists at research institutes, manufacturers of wind turbines, or small businesses installing solar arrays on homes.

Anıl Can

Energy expert at IBS Research

During our scenario workshop, we had a fecund discussion over the critical topic of "Building a roadmap for a low carbon energy system" approaching from an administrative perspective. Following a back casting methodology, we have started by defining the conditions of the anticipated low carbon energy system and clarifying the preferences on certain disputable technologies such as nuclear and CCS. Focusing on different aspects varying from market design to infrastructural requirements, we have reached to an agreement upon a series of reform steps, which aim at transforming a fossil fuel oriented energy system with high carbon emissions into an efficiently managed decentralized energy system dominated by renewables.

Our collective prescription covered both the necessary regulatory actions like properly setting the renewables and energy efficiency friendly investment environment through transparent market policies and the technical requirements regarding the electricity grid as well as the IT infrastructure. One of the major themes was determined to be "decentralization" addressing both the physical structure of the generation fleet and the reassurance for a more active participation of the locals in the decision making.

I think that the global transition to a low carbon energy system is especially critical since the 5th IPCC Assessment Report shows that climate change remains to be the one of the most difficult challenges of our time. I consider a liberalized market with properly set rules as a powerful tool supporting and maintaining this process. I also find it essential to establish some market based mechanisms for reflecting the externalities of carbon emissions to the private costs increasing them to the level of social costs while harmoniously subsidizing the abatement technologies.

Discussing about the existing practices in Germany and Turkey, a number of remarkable ideas had been exchanged. One of the most stimulating among them was the suggestion for an emerging country like Turkey to declare strictly ambitious reform targets to the international community in order to draw stronger financial and technical support. This had been particularly interesting for me considering that Turkey’s INDC submitted in September had been viewed as rather not so ambitious.

Michael Kunkis

Scientist focusing on energy and climate protection at ISOE (Institute for Social-Ecological Research)

Transformation of the energy system by sustainable everyday practices

The saving of electricity is an essential requirement for the transformation of the energy system and the abandonment of nuclear energy. The German Federal Government has set a target to reduce power consumption by 10% by 2020 and by 25% by 2050. The lower the power consumption is, the easier the transition to a low-cost and sustainable energy supply will be. Even small reductions or increases in yearly electricity consumption have a strong impact on scenarios for the energy transition.

Through their everyday practices households significantly contribute to climate change. The transition to a low-carbon energy society demands an extensive alteration of everyday action. Ambitious climate protection objectives can therefore not only be achieved through systemic or technological innovations. Moreover, a drastic change from everyday practices and consumption patterns is required. At the micro level, this means a change and adaption of a variety of social practices, e.g. heating and ventilation behavior.